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DECREE No. 153/2004/ND-CP OF AUGUST 9, 2004 ON ORGANIZATION AND MANAGEMENT OF STATE CORPORATIONS AND TRANSFORMATION OF STATE CORPORATIONS AND INDEPENDENT STATE COMPANIES AFTER THE PARENT COMPANY - SUBSIDIARY COMPANY MODEL

THE GOVERNMENT

Pursuant to the December 25, 2001 Law on Organization of the Government;

Pursuant to November 26, 2003 Law No. 14/2003/QH11 on State Enterprises;

Pursuant to June 12, 1999 Law No. 13/1999/QH10 on Enterprises;

At the proposal of the Minister of Planning and Environment,

DECREES:

Chapter I

GENERAL PROVISIONS

Article 1.- Scope of regulation

This Decree details the implementation of the Law on State Enterprises, with the following contents:

1. Regulations on organization and management of State corporations invested and set up under the State's decisions and corporations invested and set up by companies (corporations after the parent company-subsidiary company model).

2. Regulations on the transformation after the parent company-subsidiary company model of:

a/ State corporations invested and set up under the State's decisions.

b/ Independent cost-accounting member companies of corporations invested and set up under the State's decisions.

c/ Independent State companies.

Article 2.- Subjects of application

The subjects of application of this Decree include:

1. State corporations set up under the 1995 Law on State Enterprises and corporations invested and set up under the State's decisions under the 2003 Law on State Enterprises.

2. Corporations invested and set up by companies.

3. Large-scale independent State companies and State corporations' large-scale independent cost-accounting member companies, which are transformed and operate after the parent company-subsidiary company model.

Article 3.- State management and the State-owner's management over State corporations

State corporations shall be subject to the State management by State agencies at all levels according to law provisions and to the management by owner's representatives according to the Government's assignment and decentralization. Managing Boards shall act as direct representatives of the State-owner at corporations.

Chapter II

CORPORATIONS INVESTED AND SET UP UNDER THE STATE'S DECISIONS

Article 4.- Corporations invested and set up under the State's decisions

1. Corporations invested and set up under the State's decisions are forms of association and combination of independent cost-accounting member companies and other member units according to law provisions, which are closely bound together in economic interests, technology, markets and other business services, operate in one or several major specialized economic-technical branches in order to increase the capital accumulation and concentration and the business specialization of the member units and entire corporations.

2. Corporations have the legal person status, their own names, seals, managerial and executive apparatuses, and head offices in the country; have the State companies' rights and obligations as provided for in the Law on State Enterprises; and operate according to their charters and law provisions.

3. Corporations invested and set up under the State's decisions include corporations reorganized from corporations set up under the 1995 Law on State Enterprises and corporations newly set up under the 2003 Law on State Enterprises. The reorganization or setting up of corporations shall comply with the Government's regulations on setting up, reorganization and dissolution of State companies.

Article 5.- Conditions for organization of corporations invested and set up under the State's decisions

The conditions for organization of corporations invested and set up under the State's decisions shall comply with the provisions of Article 48 of the Law on State Enterprises and the Prime Minister's regulations on criteria and classification lists of State companies and State corporations' independent cost-accounting member companies.

Article 6.- Member units of corporations

1. Corporations invested and set up under the State's decisions shall have member units where the corporations invest the whole of their charter capital and member units where the corporations hold dominant shares or contribute dominant capital.

2. Units where the corporations invest the whole of their charter capital include:

a/ Independent cost-accounting member companies operating under the Law on State Enterprises, this Decree and corporations' charters.

b/ Dependent cost-accounting member units and non-business units operating according to the assignment of corporations under the provisions of the corporations' charters.

c/ State-owned one-member limited liability companies organized and operating under the Law on Enterprises.

d/ Enterprises where the corporations invest the whole of their charter capital and which are set up overseas, organized and operate according to the host countries' laws.

e/ Depending on the business scale and demand, corporations may have financial companies which are organized and operate according to law provisions on financial and credit institutions, the corporations' charters and relevant law provisions.

3. Member units where corporations hold dominant shares or contribute dominant capital:

a/ Joint-stock companies where corporations hold dominant shares and which operate under the Law on Enterprises.

b/ Limited liability companies with two or more members, where corporations contribute dominant capital and which operate under the Law on Enterprises.

c/ Joint-venture companies where corporations are the parties holding dominating powers and which operate under the Law on Foreign Investment in Vietnam.

d/ Enterprises where corporations hold dominant shares, contribute dominant capital and which are set up overseas, organized and operate according to the host countries' laws.

Apart from member units, corporations may contribute non-dominant capital to limited liability companies with two or more members, joint-stock companies, joint-venture companies involving foreign partners, and overseas companies.

Article 7.- Capital, assets and finance of corporations

1. Capital, assets and finance of corporations:

a/ The capital of a corporation consists of capital invested by the State in the corporation, capital mobilized by the corporation and other kinds of capital prescribed by law.

b/ The charter capital of a corporation is the capital amount invested by the State and inscribed in the corporation's charter, consisting of the State-invested start-up capital, additional investment capital and self-accrued capital cost-accounted at the corporation; State capital in independent cost-accounting member companies; capital portions invested by the corporation and capital portions directly invested by the State in joint-stock companies, limited liability companies, joint-venture companies or overseas companies but assigned to the corporation for management. When there is an increase or decrease in the charter capital, the corporation must promptly adjust its asset balance sheets accordingly and make additional registration of its charter capital.

c/ A corporation's assets include fixed assets and current assets formed from the corporation's charter capital, borrowed capital and other lawful capital sources managed and used by the corporation.

d/ The land use right value shall be included in the corporation's capital according to law provisions.

e/ The State budget capital shall be only invested through corporations. Basing themselves on the business demand and efficiency, corporations shall be entitled to make investment decisions, adjust the investment capital or decide not to make investments in member units and other enterprises.

f/ A corporation's profits include: Profits from business activities, profits from financial investment activities and profits from other activities of the corporation.

g/ A corporation's funds include: The financial reserve fund, the development investment fund, the reward fund, the welfare fund and other funds prescribed by law.

2. Specific regulations on capital, assets and finance of corporations shall comply with the Government-issued regimes on State-owned companies' finance and on management of capital invested by the State in other enterprises.

Article 8.- Managerial structure of corporations

1. A corporation is managerially structured to consist of a Managing Board, a Control Board, a general director, deputy general directors, a chief accountant and an assisting apparatus.

2. An independent cost-accounting member company is managerially structured to have a director, deputy directors, a chief accountant and an assisting apparatus. The functions, tasks, powers and criteria of the director, deputy directors, chief accountant and assisting apparatus shall comply with the provisions of Section I, Chapter IV of the Law on State Enterprises and this Decree.

3. A corporation's non-business units and dependent cost-accounting units shall be managerially structured according to their regulations approved by the corporation's Managing Board.

4. Financial companies shall be managerially structured according to relevant law provisions on financial companies and their charters approved by the corporations' Managing Boards.

5. Member units being State-owned one-member limited liability companies, limited liability companies with two or more members, joint-stock companies, joint-venture companies where the corporations hold dominant shares or contribute dominant capital shall be managerially structured according to law provisions on the form of such member units.

Article 9.- Managing Boards of corporations

1. The Managing Boards have the functions prescribed in Article 29 of the Law on State Enterprises; act as the owner's representatives of member units being State-owned one-member limited liability companies and independent cost-accounting member companies and as representatives for the corporations' capital portions contributed to other enterprises.

2. The Managing Boards use the offices, professional sections of the corporations and a standing section staffed with no more than 5 people working as advisors and assistants to the Boards. The standing sections shall perform the tasks assigned by the corporations' Managing Board chairmen.

3. Specific tasks and powers of the Managing Boards are as follows:

a/ Performing the tasks and exercising the powers prescribed in Clause 1, Points b, c, d, f and g of Clause 2, Clauses 3, 4 and 5 of Article 30 of the Law on State Enterprises.

b/ Deciding on strategies, long-term plans, annual business plans and business lines of corporations, independent cost-accounting member companies, dependent cost-accounting units, non-business units, State-owned one-member limited liability companies, financial companies (if any); deciding on the plans on business coordination among member units where the corporations own the whole of their charter capital or where the corporations hold dominant shares or contribute dominant capital.

c/ Deciding on the use of the corporations' capital for investing in the setting up of member units where the corporations own the whole of their charter capital and for purchasing shares of, or contributing capital to, other enterprises, which must not exceed the investment capital level falling under the Managing Boards' deciding competence prescribed at Point b, Clause 2, Article 30 of the Law on State Enterprises and by relevant laws; deciding on the reorganization, dissolution, ownership transformation of the corporations' independent cost-accounting member companies and State-owned one-member limited liability companies where the corporations own the whole of their charter capital, which have capital amounts not exceeding the level prescribed for the Managing Boards to make investment in the setting up of enterprises according to law provisions; deciding on the admission of enterprises that voluntarily join the corporations as member units according to law provisions.

d/ Deciding on the adjustment of the charter capital of State-owned one-member limited liability companies by increasing or reducing the corporation's capital portions in these companies; transfer part or whole of the charter capital of State-owned one-member limited liability companies to other organizations or individuals according to the provisions of Article 48 of the Law on Enterprises.

e/ Deciding on the managerial structures of independent cost-accounting member companies and financial companies (if any). Deciding on the organization and management model with a Managing Board or company president for State-owned one-member limited liability companies, the number and composition of Managing Board members; deciding on the appointment, relief from duty, removal from office and on the salaries of Managing Board members or company presidents of State-owned one-member limited liability companies.

f/ Deciding on the appointment of representatives for the corporations' capital contributions to other enterprises at the proposals of general directors. The Managing Boards shall not exercise the owner's powers over, or fulfill the owner's obligations towards, the member companies' capital portions contributed to other companies.

g/ Approving the charters of independent cost-accounting member companies, State-owned one-member limited liability companies; approving the operation regulations of independent cost-accounting units, non-business units; adopting the draft charters of financial companies (if any), then submitting them to the State Bank Governor for ratification.

h/ Adopting the annual financial statements of the corporations, the corporations' independent cost-accounting member companies and State-owned one-member limited liability companies, and the consolidated financial statements of the whole corporations; approving the plans on the use of after-tax profits of independent cost-accounting member companies and State-owned one-member limited liability companies.

i/ Examining and supervising the chairmen and members of the Managing Boards or company presidents and general directors (directors) of State-owned one-member limited liability companies, the directors of member units being independent cost-accounting member companies, dependent cost-accounting member units, non-business units, financial companies (if any) and the representatives for the corporations' capital portions contributed to other enterprises in the discharge of the functions and tasks prescribed by the Law on State Enterprises and this Decree.

j/ Performing the tasks and exercising the powers according to the corporations' charters and relevant laws.

4. The Managing Board chairmen shall have the powers and tasks prescribed in Article 33 of the Law on State Enterprises. The Managing Board chairmen and members shall have the obligations and responsibilities prescribed in Article 43 of the Law on State Enterprises; may participate in managing other companies when they meet the conditions prescribed in Article 36 of the Law on State Enterprises.

5. The working regime of the Managing Boards shall comply with the provisions of Article 34 of the Law on State Enterprises.

6. The criteria, composition, appointment, relief from duty and replacement of Managing Board members shall comply with the provisions of Articles 31 and 32 of the Law on State Enterprises and relevant law provisions. The process of appointment and relief from duty of Managing Board chairmen and members shall comply with the Prime Minister's decisions.

7. The salary and bonus regime applicable to the Managing Boards shall comply with the provisions of Article 35 of the Law on State Enterprises, the Government's regulations and other law provisions on the salary and bonus regime and the responsibility regime applicable to Managing Board and Control Board members, general directors and directors of State companies; law provisions on the salary regime as well as the management of labor, salaries and incomes in the State companies and other relevant law provisions.

Article 10.- Control Boards of corporations

1. The Managing Boards shall set up Control Boards consisting of between 3 and 5 members each. The Managing Boards shall decide to appoint one Managing Board member as Control Board head. The Managing Board chairmen, general directors and deputy general directors must not concurrently be Control Board heads. Other Control Board members shall be selected, appointed or relieved from duty by the Managing Boards, one of whom shall be nominated by the corporation's trade union.

Control Board members must satisfy the criteria prescribed in Clause 4, Article 37 of the Law on State Enterprises.

2. The term of office of Control Board members shall be the same as the term of office of the Managing Boards. Control Board members shall enjoy salaries and bonuses as decided by the Managing Boards according to law provisions on the salary and bonus and the Law on State Enterprises.

3. The Control Boards shall operate according to the regulations approved by the Managing Boards, having the following tasks, powers and responsibilities:

a/ Examining and supervising the legality, accuracy and honesty in the management and execution of business activities, in the recording of accounting books, financial statements and in the observance of the corporations' charters, resolutions and decisions of the Managing Boards, decisions of the Managing Board chairmen by member units where the corporations invest the whole of their charter capital.

b/ Performing the tasks assigned by the Managing Boards, reporting to the Managing Boards on a monthly, quarterly and annual basis and on a case-by-case basis on the results of their examination and supervision; detecting in time and reporting to the Managing Boards on activities which are abnormal, contrary to the enterprise management regulations or show signs of law violation.

c/ Refraining from disclosing the examination and supervision results when not so permitted by the Managing Boards; taking responsibility to the Managing Boards and law for acts of deliberately ignoring or covering up violations.

d/ Taking responsibility to the Managing Boards and law for all activities of the Control Boards.

Article 11.- General directors, deputy general directors, chief accountants and assisting apparatuses

1. General directors are representatives at law, run day-to-day activities of the corporations according to the objectives, plans and in compliance with the corporations' charters and resolutions and decisions of the Managing Boards; take responsibility to the Managing Boards and law for the exercise of the rights and the performance of the tasks assigned to them.

General directors shall have the tasks and powers prescribed in Article 41 of the Law on State Enterprises and the following tasks and powers towards member units:

a/ Formulating the plans on business coordination among member units for submission to the Managing Boards; organizing the implementation of general business coordination plans and investment plans among member units.

b/ Inspecting the application by member units of norms, criteria and price quotations prescribed for application within the corporations.

c/ Deciding on the recruitment, signing of contracts, termination of contracts or appointment, relief from duty, commendation, disciplining, salaries and allowances of directors, chief accountants of the corporations' independent cost-accounting member companies and non-business units after obtaining the approval of the Managing Boards; deputy directors of the corporations' independent cost-accounting member companies and non-business units at the proposals of the directors of these units.

d/ Proposing the Managing Boards to decide on the appointment of representatives for the corporations' capital portions contributed to other enterprises.

2. Deputy general directors shall be nominated by general directors to the Managing Boards for appointment, relief from duty, removal from office or signing of contracts, termination of contracts, commendation, disciplining and salary decision. Deputy general directors shall assist general directors in running the corporations according to the assignment and authorization of general directors; take responsibility to general directors and law for their assigned or authorized tasks.

3. Chief accountants of corporations shall be nominated by general directors to the Managing Boards for appointment, relief from duty, removal from office or signing of contracts, termination of contracts, commendation, disciplining, salary decision. Chief accountants shall be tasked to organize the accounting work of corporations; assist general directors in supervising financial matters in the corporations according to finance and accounting laws; take responsibility to general directors and law for their assigned or authorized tasks.

4. Criteria of general directors; the selection, appointment, relief from duty, signing of contracts, termination of contracts with general directors, deputy general directors, chief accountants; obligations and responsibilities of general directors, relationships between Managing Boards and general directors in managing and running corporations shall comply with Articles 24, 40, 42 and 43 of the Law on State Enterprises.

5. The Offices and professional sections shall function to advise and assist the Managing Boards and general directors in managing and running their work.

6. The salary and bonus regime applicable to general directors, deputy general directors, chief accountants shall comply with the provisions of Clause 11, Article 41 of the Law on State Enterprises; the Government's regulations on the salary and bonus regime as well as the responsibility regime applicable to Managing Board and Control Board members, general directors, directors of State companies; the law provisions on the salary regime, management of labor, salaries and incomes in State companies and relevant law provisions. The salary and bonus payment and settlement regime for general directors, deputy general directors, chief accounts shall comply with the provisions of Clause 10, Article 26 of the Law on State Enterprises, and relevant law provisions.

The regime of responsibility associated with salaries and bonuses of general directors shall comply with the provisions of Clause 3 and Clause 5, Article 43 of the Law on State Enterprises.

Article 12.- Independent cost-accounting member companies and relationships between corporations and independent cost-accounting member companies

Independent cost-accounting member companies are member units of corporations, having the legal person status, enjoying business autonomy and being bound to their corporations in rights and obligations as follows:

1. An independent cost-accounting member company's capital consists of: capital invested in the company by the corporation, capital mobilized by the company itself and other capital sources as prescribed by law.

For independent cost-accounting member enterprises of corporations set up under the 1995 Law on State Enterprises then rearranged and transformed into independent cost-accounting member companies, the State capital portions in these companies shall be converted into capital invested in the companies by corporations while corporations shall act as owners of these companies.

2. Independent cost-accounting member companies shall have the following rights over their capital and assets: To manage and take initiative in using their own capital and capital invested by corporations; to possess and use their capital and assets for business purposes, acquire legitimate interests from their capital and assets; to dispose of their capital and assets according to the provisions of the Law on State Enterprises, this Decree and relevant laws; to use and manage the State-assigned or -leased assets being land and natural resources according to law provisions on land and natural resources.

Corporations shall not transfer their capital invested in independent cost-accounting member companies as well as capital and assets of these companies by the non-payment mode, except for the cases where they decide to reorganize independent cost-accounting member companies or realize the objective of providing public-utility products and services.

3. When they receive requests or goods orders from the State or participate in biddings for public-utility activities, the companies shall have the rights and obligations prescribed in Article 19 of the Law on State Enterprises.

4. Independent cost-accounting member companies shall be bound to their corporations in rights and obligations as follows:

a/ To implement the general business plans of their corporations; perform production and business tasks assigned by their corporations on the basis of economic contracts signed with the latter; take responsibility for the efficiency of business activities carried out in coordination with their corporations; sign at their discretion economic contracts and perform economic contracts signed by their corporations then assigned to them.

b/ To decide on investment projects in their companies and on making investments in, or contributing capital to, other companies according to the decentralization of their corporations; participate in investment of various forms together with their corporations or carry out investment projects assigned by their corporations according to their corporations' plans on the basis of contracts signed with the latter.

c/ To take responsibility to their corporations for the efficient use of capital and resources invested by the latter; preserve and develop capital invested by their corporations and capital mobilized by themselves; take responsibility to their corporations for the investment of capital in the setting up of other enterprises; bear civil liability with their whole assets; periodically re-value their assets according to the Government's regulations and their charters.

Corporations shall take responsibility for other asset liabilities and obligations of their independent cost-accounting member companies within the amounts of the companies' charter capital.

d/ To propose their corporations to decide or to be authorized by their corporations to decide on the setting up, re-organization, dissolution, merger of dependent cost-accounting units and on the managerial apparatuses of dependent cost-accounting units.

e/ To formulate and apply labor and supplies norms, unit prices for salary payment, and other costs on the basis of ensuring their business efficiency and compliance with law provisions and their charters.

f/ After fulfilling their tax obligations and carrying forward losses according to the provisions of the Law on State Enterprises and fulfilling other financial obligations as prescribed by law, and making deductions for the financial reserve funds, to divide the remaining profits in proportion to the capital invested by their corporations and capital mobilized by themselves. Profit amounts divided in proportion to the capital invested by their corporations shall be used for re-investment to increase the State capital in the companies or for the formation of the corporations' centralized funds according to the Government's regulations, Profit amounts divided in proportion to the capital mobilized by the companies themselves shall be partially deducted into their development investment funds according to the Government-prescribed percentage while the rest shall be distributed to the reward and welfare funds under the companies' own decisions.

g/ The companies are obliged to conduct business at a profit, ensure the corporation-assigned target ratio of profits to the capital invested by the corporations; register, declare and fully pay taxes; fulfill the obligations towards their corporations and other financial obligations prescribed by law.

h/ To apply the regimes of accounting, audit, financial statements and statistical reports according to law provisions and at their corporations' requests; submit to the supervision and examination by their corporations, periodically report accurate and full information on their companies and send financial statements to their corporations; abide by the inspection regulations of the finance agencies and competent State agencies according to law provisions.

i/ Other rights and obligations prescribed by the Law on State Enterprises and relevant laws.

Article 13.- Relationships between corporations and their non-business units, dependent cost-accounting units and financial companies

1. Non-business units shall implement the cost-accounting decentralization regimes prescribed by their corporations; may create revenue sources from the performance of contracts for provision of services, scientific researches and technology transfer training for units inside and outside their corporations. Non-business units shall operate according to their charters or regulations approved by their corporations' Managing Boards.

2. Corporations' dependent cost-accounting units may take initiative in signing economic contracts, carrying out business, financial, organizational and personnel activities according to their corporations' decentralization prescribed in their charters or organization and operation regulations approved by their corporations' Managing Boards. Corporations shall take responsibility for financial obligations arising from these units' commitments.

3. Corporations' financial companies may be organized, operate and have relationships with their corporations under the guidance of the Finance Ministry, the State Bank and their operation charters adopted by their corporations' Managing Boards and ratified by the State Bank Governor.

Article 14.- Relationships between corporations and State-owned one-member limited liability companies where corporations invest the whole of their charter capital

Corporations are owners of State-owned one-member limited liability companies where they own the whole of their charter capital and exercise the owner's rights and fulfil the owner's obligations towards these companies according to the provisions of Clause 1 of Article 27, Clause 1 and Clause 2 of Article 46, Article 47 and Article 48 of the Law on Enterprises, the companies' charters, the Government's regulations, and other law provisions.

Article 15.- Relationships between corporations and their member units being companies where corporations hold dominant shares or contribute dominant capital

1. Joint-stock companies, limited liability companies with two or more members, joint-venture companies where the corporations' shares or contributed capital portions account for over 50% of their charter capital and the corporations hold dominating powers, are the corporations' member units.

2. Member units where the corporations hold dominant shares or contribute dominant capital are set up, organized and operate under the Law on Enterprises, the Law on Foreign Investment in Vietnam and other relevant law provisions. Corporations shall manage their dominant shares or contributed dominant capital under the provisions of Article 58 of the Law on State Enterprises and the Government's regulations on management of dominant shares and dominant contributed capital and management of State capital invested in other enterprises.

Article 16.- Relationships between corporations and companies where corporations hold non-dominant shares or contribute non-dominant capital

1. Joint-stock companies, limited liability companies with two or more members, joint-venture companies or overseas companies where the corporations' shares or contributed capital account for 50% or less of their charter capital, shall not be the corporations' member units and not be dominated by the corporations.

2. Companies where the corporations hold non-dominant shares or contribute non-dominant capital shall be set up, organized and operate under the Law on Enterprises, the Law on Foreign Investment in Vietnam and other relevant law provisions. Corporations shall manage their shares or contributed capital in these companies under the provisions of Article 59 of the Law on State Enterprises and the Government's regulations on management of State capital invested in other enterprises.

Article 17.- Responsibilities of corporations

1. Corporations must not abuse their position of holding the whole charter capital or dominant shares or contributed capital in their member units being independent cost-accounting member companies, State-owned one-member limited liability companies or companies where the corporations hold dominant shares or contribute dominant capital to cause harms to the interests of their member units, creditors and involved parties.

Corporations must not insert regulations in the charters of independent cost-accounting member companies or State-owned one-member limited liability companies, which cause harms to the interests of such companies, creditors and involved parties.

2. Where they commit the following acts without consulting the member units stated in Clause 1 of this Article, thereby causing damage to such member units, they must bear responsibility for paying damages to the member units and involved parties.

a/ Forcing member units to sign and perform economic contracts which are unfair and disadvantageous to such member units.

b/ Transferring capital, assets of member units, causing damage to such member units.

c/ Transferring a number of efficient and profitable business activities from one member unit to another without consulting the member unit having such activities, resulting in losses or seriously decreased profits on the part of such member unit.

d/ Deciding on production and business tasks of member units in contravention of the charters and laws; assigning the corporations' tasks to member units for performance without signing economic contracts with these units.

e/ Forcing member units to lend capital to the corporations or other member units at low interest rates or under unreasonable borrowing and repayment conditions or to provide loans for the corporations or other member units to perform economic contracts, which involve a lot of risk to business activities of such member units.

Chapter III

CORPORATIONS AFTER THE PARENT COMPANY - SUBSIDIARY COMPANY MODEL

Article 18.- Corporations after the parent company-subsidiary company model

1. Corporations which are invested and set up by companies themselves (corporations after the parent company-subsidiary company model) are a form of mutual association and domination by means of investment, capital contributions, technological know-how, trademarks or markets among enterprises having the legal person status, of which one State-owned company holds the right to dominate other member enterprises (called the parent company for short) and other member enterprises are dominated by the parent company (called subsidiary companies for short) or have non-dominant capital portions contributed by the parent company (called associated companies).

2. A consortium consisting of parent companies and subsidiary companies shall not have the legal person status. Parent companies shall have the legal person status, own names, seals, managerial and executive apparatuses and head offices based in the country.

Article 19.- Structure of corporations after the parent company-subsidiary company model

Corporations after the parent company-subsidiary company model operating under this Decree are structured as follows:

1. Parent company, which is a State-owned company operating under the Law on State Enterprises and this Decree; formed through the transformation, reorganization of a corporation, a corporation's independent cost-accounting member company, an independent State-owned company or on the basis of a company investing in, buying shares of, or contributing its capital and other resources to, subsidiary companies or associated companies; and holding dominating powers prescribed in Clause 2 of this Article.

2. Subsidiary companies:

a/ Companies where the parent company contributes dominant capital, including limited liability companies with two or more members, joint-stock companies, joint-venture companies involving foreign partners and overseas companies.

b/ State-owned one-member limited liability companies where the parent company holds the whole of their charter capital.

If the structure of corporations after the parent company-subsidiary company model is composed of the type of subsidiary companies being State-owned one-member limited liability companies, there must be additionally the types of subsidiary companies prescribed at Point a, Clause 2 of this Article.

3. Associated companies, which are companies where the parent companies contribute non-dominant capital, organized in the form of limited liability companies with two or more members, joint-stock companies, joint-venture companies involving foreign partners or overseas companies.

Article 20.- Functions, managerial structure of parent companies

1. Parent companies have the function of directly conducting production and business and making financial investments in other enterprises or only making financial investments in other enterprises. Parent companies have the rights and obligations of State-owned companies prescribed in Chapter III of the Law on State Enterprises; exercise the owner's rights over, and fulfil the owner's obligations towards, their capital amounts invested in their subsidiary companies and associated companies.

2. A parent company is managerially structured to consist of a Managing Board, a Control Board, a general director, deputy-general directors, a chief accountant and an assisting apparatus. A parent company's managerial apparatus is the corporation's apparatus.

Article 21.- Managing Boards of parent companies

1. The Managing Boards of parent companies have the functions, tasks and powers like the Managing Boards of corporations invested and set up under the State's decisions; have the working regime and membership, and perform the tasks and exercise the powers prescribed in Clause 1, Point a of Clause 3, Clauses 4, 5 and 6, Article 9 of this Decree, and the following specific tasks and powers:

a/ Deciding on strategies, long-term plans, annual business plans and business lines of the parent companies and their dependent cost-accounting units, non-business units; deciding on plans for business coordination between the parent companies and subsidiary companies.

c/ Deciding on the use of the parent companies' capital for investing in the setting up of subsidiary companies being State-owned one-member limited liability companies and for purchasing shares of, or contributing capital to, other enterprises, which must not exceed the level of investment capital falling under the Managing Boards' deciding competence prescribed at Point b, Clause 2, Article 30 of the Law on State Enterprises and by relevant laws; deciding on the reorganization, dissolution, ownership transformation of subsidiary companies being State-owned one-member limited liability companies which have capital amounts not exceeding the level prescribed for the Managing Boards in making investments in the setting up of enterprises according to law provisions.

c/ Deciding on the adjustment of the charter capital of State-owned one-member limited liability companies by increasing or reducing the parent companies' capital contributions; transferring part or whole of the charter capital of State-owned one-member limited liability companies to other organizations or individuals according to the provisions of Article 48 of the Law on Enterprises.

d/ Deciding on the organization and management model with a Managing Board or company president for State-owned one-member limited liability companies, the number and composition of Managing Board members; deciding on the appointment, relief from duty, removal from office and on the salaries of Managing Board chairmen and members or presidents of State-owned one-member limited liability companies. The Managing Boards shall not exercise the owners' powers over, and fulfill the owner's obligations towards, the subsidiary companies' capital contributed to other companies.

e/ Exercising the owner's powers over, and fulfilling the owner's obligations towards, parent companies' shares or contributed capital in the companies where the parent companies have shares or contributed capital.

f/ Adopting the annual financial statements of the parent companies, State-owned one-member limited liability companies and the consolidated financial statements of the parent companies; approving the plans on the use of after-tax profits of State-owned one-member limited liability companies.

g/ Examining and supervising the chairmen and members of the Managing Boards, presidents and general directors (directors) of State-owned one-member limited liability companies; the directors of dependent cost-accounting member units, non-business units, and the representatives for the parent companies' capital contributed to other enterprises in the performance of the functions and tasks prescribed by the Law on State Enterprises and this Decree.

h/ Performing the tasks and exercising the powers according to the parent companies' charters and relevant laws.

2. The salary and bonus regime applicable to Managing Boards shall comply with the provisions of Clause 7, Article 9 of this Decree.

Article 22.- Control Boards of parent companies

The Control Boards shall be set up by the Managing Boards of the parent companies, having the structure, functions, tasks and operating regime prescribed in Article 10 of this Decree.

Article 23.- General directors, deputy general directors, chief accountants and assisting apparatuses

1. General directors, deputy-general directors, chief accountants and assisting apparatuses of the parent companies have the tasks and powers prescribed in Article 11 of this Decree.

2. The salary and bonus regime applicable to general directors, deputy-general directors, chief accountants shall comply with the provisions of Clause 6, Article 11 of this Decree.

Article 24.- Relationships between parent companies and subsidiary companies being State-owned one-member limited liability companies

1. Parent companies are owners of State-owned one-member limited liability companies which are set up by the parent companies or transformed from independent State-owned companies or corporations' independent cost-accounting member companies. Parent companies shall exercise the owner's rights over, and fulfill the owner's obligations towards, State-owned one-member limited liability companies prescribed in Clause 1, Article 27, Clause 1 and Clause 2 of Article 46, Article 47 and Article 48 of the Law on Enterprises, the charters of the companies, and the Government's regulations on transformation of State-owned companies into State-owned one-member limited liability companies.

2. State-owned one-member limited liability companies are organized and operate under the Law on Enterprises, the Government's regulations \on transformation of State-owned companies into State-owned one-member limited liability companies, and relevant law provisions.

Article 25.- Relationships between parent companies and subsidiary companies being joint-stock companies, limited liability companies with two or more members, joint-venture companies or overseas companies

1. Subsidiary companies being joint-stock companies, limited liability companies with two or more members, joint-venture companies or overseas companies, where the parent companies hold dominant shares or contribute dominant capital, are set up, organized and operate under the Law on Enterprises, the Law on Foreign Investment in Vietnam, foreign laws and other relevant law provisions.

2. Parent companies shall exercise the rights and fulfill the obligations as well as responsibilities of shareholders, members, joint-venture parties, contributors of dominant capital as prescribed by law and the charters of the companies where the parent companies hold dominant shares or contribute dominant capital.

3. Parent companies shall directly manage their dominant shares or contributed dominant capital in joint-stock companies, limited liability companies, joint-venture companies and overseas companies; have the rights over, and obligations towards, their dominant shares or contributed dominant capital prescribed in Article 58 of the Law on State Enterprises.

Article 26.- Relationships between parent companies and associated companies

Parent companies shall manage their capital contributed to associated companies under the provisions of Article 59 of the Law on State Enterprises.

Article 27.- Responsibilities of parent companies

Parent companies shall be liable to their subsidiary companies in the case where the parent companies abuse their position of holding the whole charter capital or dominant shares or dominant contributed capital to cause harms to the interests of subsidiary companies, creditors and involved parties like corporations as prescribed in Article 17 of this Decree.

Chapter IV

TRANSFORMATION, REORGANIZATION AFTER THE PARENT COMPANY-SUBSIDIARY COMPANY MODEL

Article 28.- Purposes of transformation, reorganization of corporations invested and set up under the State's decisions, corporations' independent cost-accounting member companies, independent State companies after the parent company-subsidiary company model

1. The transformation and reorganization of corporations invested and set up under the State’s decisions into corporations after the parent company-subsidiary company model aim to shift from the administrative association through the capital assignment mechanism to the stable association mostly through the financial investment mechanism; to clearly determine the interests and responsibilities related to capital and economic interests between parent companies and subsidiary companies and associated companies; enhance the business capabilities of the associating units, and create conditions for their development into economic conglomerates.

2. The transformation and reorganization of independent State-owned companies or corporations' independent cost-accounting member companies after the parent company-subsidiary company model aim to create conditions for the development of the business capabilities, scale and scope of companies, promote the capital accumulation, the utilization of financial potentials and other resources of companies for investment, capital contribution and association with other enterprises, accelerate the equitization of member units of companies.

Article 29.- Subjects to be transformed or reorganized

1. The following subjects that meet the conditions prescribed in Article 30 of this Decree shall be reorganized and transformed after the parent company-subsidiary company model:

a/ State corporations set up under the 1995 Law on State Enterprises.

b/ Corporations invested and set up under the State's decisions under the 2003 Law on State Enterprises.

c/ Independent cost-accounting member companies of corporations invested and set up under the State's decisions.

d/ Independent State companies.

2. State corporations, State corporations' independent cost-accounting member companies and independent State companies, which have made investments in, or contributed capital to, other enterprises or have completely transformed their member units and are structured to be composed of a State company holding dominating powers over other enterprises, subsidiary companies and associated companies in line with the structure prescribed in Article 55 of the 2003 Law on State Enterprises, shall not have to undergo the transformation or reorganization according to the process and procedures prescribed in this Chapter. The persons who have issued decisions to set up State corporations, State corporations' independent cost-accounting member companies or independent State companies shall decide to apply the parent company-subsidiary company model to these corporations and companies.

Article 30.- Conditions for transformation and reorganization

1. State corporations must fully meet the following conditions:

a/ All of their member units have been transformed, are being transformed or have been listed and have their plans approved by competent authorities for equitization or transformation into State-owned one-member limited liability companies in order to form the structure composed of a parent company, subsidiary companies and associated companies.

b/ Parent companies are on the Prime Minister-approved list of those where the State continues to hold 100% of their charter capital and which operate under the Law on State Enterprises.

c/ Parent companies have big capital amounts, are able to use their existing capital sources or have viable plans to mobilize capital and invest sufficient capital in their subsidiary companies and associated companies in order to dominate their subsidiary companies, use technological know-how, trademarks and markets to dominate their subsidiary companies.

d/ Corporations have development potentials, are able to conduct multiple business lines one of which is the major business line, have many dependent units inside and outside the country.

2. Independent State companies, corporations' independent cost-accounting member companies must fully meet the following conditions:

a/ Being possible to be organized into parent companies with big capital amounts or able to use their financial potentials, technological know-how, trademarks and markets to make capital investments in other enterprises in order to dominate them.

b/ Parent companies on the Prime Minister-approved list of those where the State continues to hold 100% of their charter capital and which operate under the Law on State Enterprises.

c/ Having dominant shares or dominant contributed capital in many other enterprises or having obtained the approval of the Prime Minister (for member enterprises of corporations set up under the Prime Minister's decisions), ministers or provincial-level People's Committees (for independent State companies) for the plans on equitization of their sections (excluding sections constituting the parent companies) or for the plans on investment, contribution of over 50% of the companies' charter capital to other companies in order to hold dominant shares or dominant contributed capital in these companies.

3. Corporations, independent State companies, corporations' independent cost-accounting member companies which fail to satisfy the conditions stated at Point b of Clause 1, Point b of Clause 2 of this Article may be transformed into the following kinds of parent companies to operate under the Law on Enterprises:

a/ Parent companies being one-member limited liability companies with 100% of State capital.

b/ Parent companies being limited liability companies with two or more members with 100% of State capital.

c/ Parent companies being limited liability companies with two or more members, where the State contributes dominant or non-dominant capital.

d/ Parent companies being joint-stock companies with 100% of State capital.

e/ Parent companies being joint-stock companies where the State contributes dominant or non-dominant capital.

Article 31.- Modes of transformation, reorganization of corporations or corporations' State-owned one-member limited liability companies after the parent company-subsidiary company model

1. Corporations which are prescribed at Points a and b, Clause 1 of Article 29 and meet the conditions prescribed in Clause 1, Article 30 of this Decree, depending on the nature of business lines, technologies, relationships in terms of business, capital investment and interdependence between corporations and their member units and among member units, may be reorganized by the following modes:

a/ The corporations' administration offices and managerial offices, dependent cost-accounting member units, non-business units together with one or a number of independent cost-accounting member companies holding the key position in the corporations or operating in the corporations' major business domains shall be reorganized into parent companies. In case of transformation or reorganization of big corporations and if it is deemed unnecessary to merge one or a number of independent cost-accounting member companies into parent companies, the corporations' administration offices and managerial offices, dependent cost-accounting member units and non-business units may be organized into parent companies.

Enterprises where the corporations contribute dominant capital and member units where the corporations invest the whole of their charter capital, after being transformed into one-member limited liability companies or companies with dominant contributed capital shall become subsidiary companies; enterprises having a capital portion of the corporations shall become associated companies of the parent companies.

b/ For the case of transformation of entire-branch cost-accounting corporations, the corporations' offices and managerial agencies as well as dependent cost-accounting member companies holding the key position in the corporations or operating in the corporations' major business domain shall be reorganized into parent companies.

Enterprises where the corporations contribute dominant capital and member units where the corporations invest the whole of their charter capital, after being transformed into one-member limited liability companies or companies with dominant contributed capital shall become subsidiary companies; enterprises having a capital portion of the corporations shall become associated companies of the parent companies.

2. For corporations' independent cost-accounting member companies which meet all conditions prescribed in Clause 2, Article 30 of this Decree, depending on the characteristics of their technologies, degree of dependence and the investment relationships already established with the parent companies, they may be split into independent State parent companies or continue to be part of the structures of the corporations.

Where corporations shift to operate after the parent company-subsidiary company model, if the independent cost-accounting member companies are transformed into parent companies but continue to be part of the corporations' structures, these member companies must be enterprises operating under the Law on Enterprises.

3. Non-business units, institutes and schools of corporations may, depending on the degree and requirement of association with the parent companies in terms of capital, finance, technologies, markets, research and training, be transformed into dependent cost-accounting sections of the parent companies or into subsidiary companies or associated companies.

For research institutes of corporations, which regularly apply research results and transfer technologies to production or business, have capital contributions in enterprises where the institutes apply their research results, if they satisfy all conditions on parent companies prescribed in Clause 2, Article 30 of this Decree, they may be separated from their corporations to become parent companies which may be either independent from, or part of, the corporations' structures.

Article 32.- Modes of transformation, reorganization of independent State companies after the parent company-subsidiary company model

Big independent State companies which fully satisfy the conditions prescribed in Clause 2, Article 30 of this Decree shall be transformed into parent companies; dependent cost-accounting units may, depending on the amount and nature of investment capital of independent State companies as well as the strategic importance of independent State companies, be transformed into one of the types of subsidiary companies prescribed in Clause 2, Article 19 of this Decree.

Article 33.- Competence and procedures for making and approval of transformation lists and plans

1. The ministries and provincial-level People's Committees shall draw up the lists and plans on the transformation of corporations and independent State companies set up under decisions of the ministries or provincial-level People's Committees. The Managing Boards of corporations set up under the Prime Minister' decisions shall make plans on the transformation of their corporations and the list of to be-transformed independent cost-accounting member companies of the corporations.

2. On the basis of the conditions prescribed in Article 30 of this Decree and the actual situation of corporations and corporations' independent cost-accounting member companies or independent State companies:

a/ The ministries or provincial-level People's Committees shall submit to the Prime Minister for approval the list and plans on the transformation of corporations, corporations' independent cost-accounting member companies and independent State companies set up under decisions of the ministries or provincial-level People's Committees.

b/ The Managing Boards of corporations set up under the Prime Minister's decisions shall submit to the Prime Minister for approval the plans on the transformation of corporations and the lists of to be-transformed independent cost-accounting member companies of their corporations.

Article 34.- Responsibilities of transformed corporations or State companies

1. Corporations, corporations' independent cost-accounting member companies, independent State companies (hereinafter called corporations, companies) which are selected, have their transformation lists and plans approved, and reorganized after the parent company-subsidiary company model shall have the responsibilities:

a/ To review every member unit, the whole corporations or companies, compare with the transformation conditions, determine the structures, modes of transformation, legal forms of the parent companies and of each type of subsidiary companies.

b/ To inventory, classify, determine all kinds of existing capital, assets, liabilities and labor; determine the projected total capital amounts of parent companies, the projected capital amounts to be invested by parent companies in each State-owned one-member limited liability company under their ownership and in enterprises where parent companies hold dominant or non-dominant capital; make financial statements up to the transformation time.

c/ To formulate the schemes on transformation, reorganization of corporations, companies after the parent company-subsidiary company model and the plans on the disposal of capital, assets, finance and labor upon transformation.

The transformation or reorganization schemes must contain at least the following contents: The actual situation of the business organization, management organization, production and business results of corporations and each member unit; the situation of finance, investment and capital contributions of corporations and each member unit in other enterprises, the projected structures, numbers and types of subsidiary companies and/or associated companies; the models, organizational structures, functions and tasks of parent companies; the modes of reorganizations or transformation, the tentative plans on the transformation after the parent company-subsidiary company model; the tentative plans on the transfer of interests, obligations, assets, liabilities, labor to parent companies and each subsidiary company; changes in production and business activities after the transformation.

d/ To formulate the draft charters of parent companies and subsidiary companies, clearly determining the relationships between parent companies and subsidiary companies.

2. Corporations, companies which have de facto formed the structures of member units meeting the conditions prescribed in Article 55 of the Law on State Enterprises shall not have to formulate transformation schemes but must only comply with the provisions of Point d, Clause 1 of this Article.

Article 35.- Submission, approval of transforma-tion schemes and transformation decisions

The submission, evaluation and approval of schemes shall comply with the following order and procedures:

1. The Prime Minister shall approve the transformation schemes of corporations and companies at the proposals of the evaluation councils which are set up under his/her decisions.

2. After the Prime Minister approves the transformation schemes, authorities competent to decide on the setting up of corporations or companies shall decide on the transformation; organize the implementation of the transformation schemes; approve the charters of parent companies; carry out other procedures regarding the transformation after the parent company-subsidiary company model.

3. A transformation decision must at least contain the following contents: The names, addresses and legal forms of the parent company, subsidiary companies and associated companies; the objectives, business lines and charter capital of the parent company; the amount and percentage of the parent company's capital in each subsidiary company and each associated company; responsibilities of the parent company and each subsidiary company for the inheritance of the rights and obligations and for the handling of matters existing and arising in the transformation process.

Article 36.- Principles for handling of capital, assets, finance and labor upon transformation

1. All assets of corporations, independent cost-accounting member companies, independent State companies upon transformation shall be calculated in value.

2. Existing assets under the ownership of corporations, independent cost-accounting member companies, independent State companies shall be inventoried and classified for determination of their quantities and actual conditions. Existing assets for the formation of assets directly managed by parent companies and assets delivered to subsidiary companies being State-owned one-member limited liability companies shall not be re-valued. For all cases of ownership transformation, assets must be re-valued at the market prices according to law provisions on ownership transformation.

3. For assets which are leased, borrowed, kept in custody for others or kept in consignment: Transformed or reorganized companies shall have to continue leasing, borrowing, keeping in custody for others or in consignment such assets according to the agreements with the asset owners.

4. Assets which are redundant, no longer needed, stockpiled, awaiting liquidation, lost or otherwise damaged shall be handled according to current law provisions.

5. Principles for handling liabilities

a/ For receivable liabilities of corporations, independent cost-accounting member companies, independent State companies which are transformed into parent companies and receivable liabilities of rearranged, reorganized or transformed member units of corporations, independent cost-accounting member companies or corporations' independent State companies: Parent companies and rearranged, reorganized or transformed member units of State corporations, independent State companies, independent cost-accounting member companies of State corporations shall have to receive and recover liabilities which are due and recoverable. For receivable liabilities which are irrecoverable, after clearly identifying the causes and responsibilities of collectives as well as individuals, the companies shall have to receive and recover debts and may cost-account as decrease in the owner's capital the difference between the value of losses and the amounts compensated by collectives and/or individuals.

b/ For payable liabilities, newly set-up parent companies, rearranged, reorganized or transformed member units of State corporations, independent State companies, independent cost-accounting member companies of State corporations shall have to inherit liabilities payable to creditors according to commitments, including tax arrears, debts owed to the budget as well as to officials, employees and workers; pay due debts according to the plans already approved by competent authorities. For payable liabilities which have no claimants and the value of assets whose owners are unidentifiable, they shall be included in the owner's capital in the parent companies and subsidiary companies newly set up through transformation. The handling of payable liabilities of member companies transformed into joint-stock companies shall comply with the regulations on equitization of State companies.

6. Parent companies and subsidiary companies set up on the basis of transformation or reorganization of member units of State corporations or independent State companies or State corporations' independent cost-accounting member companies shall have to continue employing the existing laborers, inherit all rights and obligations towards laborers according to the plans already approved by competent authorities and law provisions on rearrangement, reorganization, equitization and transformation of State companies into State-owned one-member limited liability companies; redundant laborers shall be handled according to the common policies in the course of renewal and rearrangement of State companies. Laborers who voluntarily terminate their labor contracts shall enjoy entitlements prescribed by labor legislation.

Article 37.- Principles for determining the charter capital of parent companies

1. The parent companies' charter capital formed from the transformation of corporations, corporations' independent cost-accounting member companies or independent State companies is the State-invested capital amount inscribed in the parent companies' charters, including:

a/ Actually existing State capital reflected in the accounting books at the time of transformation, which is cost-accounted centralizedly at the corporations, the corporations' independent cost-accounting member companies or independent State companies.

b/ The charter capital of State-owned one-member limited liability companies owned by corporations, corporations' independent cost-accounting member companies or independent State companies.

c/ State capital contributed by corporations, corporations' independent cost-accounting member companies or independent State companies to joint-stock companies, limited liability companies with two or more members, joint-venture companies involving foreign partners and overseas investment companies.

d/ State capital (if any) additionally invested in parent companies for the case of transformation of corporations or independent State companies; capital (if any) additionally invested by corporations into parent companies for the case of transformation of corporations' independent cost-accounting member companies.

e/ After-tax profits reinvested and additionally supplemented to the charter capital.

2. The charter capital of parent companies must not be lower than the capital level set in the criteria and list of classification of State companies and State corporations, promulgated by the Prime Minister.

a/ For parent companies transformed from corporations: their charter capital must not be lower than the capital level prescribed for State corporations.

b/ For parent companies transformed from corporations' independent cost-accounting member companies or independent State companies: Their charter capital must not be lower than the capital level prescribed for State companies.

3. When increasing or decreasing their charter capital, parent companies must promptly adjust their accounting balance sheets accordingly and register such with the business registration agencies.

Article 38.- Business registration and asset re-registration

1. Parent companies and subsidiary companies, after transformation, must make re-registration according to law provisions applicable to their legal forms.

2. Member companies which, before transformation, are one-member limited liability companies or joint-stock companies or joint-venture companies shall not have to make re-registration.

3. Parent companies may be named as company or use the corporations' common names. Where corporations' independent cost-accounting member companies are transformed after the parent company-subsidiary company model, the parent companies transformed from independent cost-accounting member companies must not be named as corporation.

4. After being granted the business registration certificates, parent companies and subsidiary companies must fill in the procedures to register the ownership of assets transferred from corporations or member units with competent State bodies. All assets whose ownership is transferred from corporations or member units to parent companies or subsidiary companies shall not be subject to registration fee.

Article 39.- Take over of rights and obligations of transformed corporations

Parent companies and member units which are reorganized from the transformation of corporations invested and set up under the State's decisions shall have to inherit all the rights, legitimate interests as well as obligations of the transformed corporations or member companies.

Article 40.- The State-owner's rights over and obligations towards parent companies after transformation

1. Parent companies which meet, and are transformed under, the conditions prescribed in Clause 1 and Clause 2, Article 30 of this Decree, after having completely gone through transformation, shall continue operating under the Law on State Enterprises. The State-owner shall exercise the owner's rights over, and the owner's obligations towards, parent companies under the provisions of Articles 64, 65, 66 and 67 of the Law on State Enterprises.

2. For parent companies which are transformed under the conditions prescribed in Clause 3, Article 30 of this Decree and operate under the Law on Enterprises or the Law on Foreign Investment in Vietnam, the State-owner shall exercise its rights over, and its obligations towards, its capital invested in the parent companies under the provisions of Articles 70, 71 and 72 of the Law on State Enterprises.

Chapter V

IMPLEMENTATION PROVISIONS

Article 41.- Implementation effect

1. This Decree takes effect 15 days after its publication in the Official Gazette.

2. State corporations that meet the conditions to be corporations invested and set up under the State's decisions under the provisions of Article 48 of the Law on State Enterprises must adjust their membership structures according to the provisions of Article 49 of the Law on State Enterprises; readjust their managerial structures; amend and supplement their charters to make them comply with the regulations within the time limit prescribed in Article 94 of the Law on State Enterprises and this Decree. State enterprises being independent cost-accounting members of corporations set up under the 1995 Law on State Enterprises must amend and supplement their charters and apply the regulations on independent cost-accounting member companies of corporations invested and set up under the State's decisions.

3. State corporations which were set up under the 1995 Law on State Enterprises or newly set up, meet the conditions prescribed in Clause 3, Article 74 of the 2003 Law on State Enterprises, must be transformed and reorganized into corporations after the parent company-subsidiary company model.

4. Implementation provisions applicable to independent cost-accounting member enterprises of State corporations organized after the 1995 Law on State Enterprises in the period of reorganization or ownership transformation:

a/ For enterprises falling into the subjects where the State continues to hold 100% of their charter capital and transformed into State-owned one-member limited liability companies, during the transformation period prescribed in the arrangement and renewal schemes already approved by competent authorities, they may continue operating under the provisions of Clause 1, Article 52 of the 2003 Law on State Enterprises, applicable to corporations' independent cost-accounting member companies.

b/ For enterprises not falling into the subjects where the State continues to hold 100% of their charter capital, during the arrangement and ownership transformation period prescribed in the arrangement and renewal schemes already approved by competent authorities, they may continue operating under the provisions of Clause 1, Article 52 of the 2003 Law on State Enterprises, applicable to corporations' independent cost-accounting member companies.

5. For State corporations, corporations' independent cost-accounting member State enterprises, independent State enterprises, which are subject to execution of the Prime Minister's decision on experimental transformation after the parent company-subsidiary company model:

a/ Enterprises which have completely been transformed shall comply with the provisions of Clause 6 of this Article.

b/ Enterprises which have had their transformation schemes approved but have not yet been completely transformed under the approved schemes shall not have to readjust such schemes but must review the structures of their member units, submit them to the persons who have approved the schemes for readjustment of units which are not suitable to the provisions of this Decree.

c/ Enterprises which have been included in the approved lists but have not yet formulated schemes must formulate schemes and comply with the provisions of this Decree.

6. State corporations, corporations' independent cost-accounting member State enterprises, independent State enterprises which have completed the transformation after the parent company-subsidiary company model before this Decree takes effect shall have to adjust their managerial and membership structures and amend and supplement their operation charters to comply with the provisions of this Decree.

7. State corporations which fail to meet the conditions to be corporations invested and set up under the State's decisions prescribed in Article 48 of the 2003 Law on State Enterprises or fail to meet the conditions for transformation and organization into corporations after the parent company-subsidiary company model prescribed in Clause 3, Article 74 of the 2003 Law on State Enterprises must be reorganized, ownership-transformed or dissolved; the reorganization, ownership transformation and dissolution measures shall comply with the Government's regulations on setting up, reorganization, dissolution and ownership transformation of State companies.

Article 42.- Implementation organization and implementation responsibilities

1. The Ministry of Planning and Investment, the Ministry of Finance, the Ministry of Labor, War Invalids and Social Affairs and the Ministry of Home Affairs shall have to guide the implementation of this Decree.

The Ministry of Planning and Investment shall have to monitor the implementation of this Decree.

2. The ministers, the heads of the ministerial-level agencies, the heads of the Government-attached agencies, the presidents of the provincial/municipal People's Committees, the chairmen of the Managing Boards, and general directors of corporations shall have to implement this Decree.

On behalf of the Government

Prime Minister
PHAN VAN KHAI